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US Equity Crowdfunding: A Review of Current Legislation and A Conceptual Model of the Implications for Equity Funding

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  • Lynda Y. de la Viña
  • Stephanie Lee Black

Abstract

Recent Securities and Exchange Commission (SEC) guidelines provide a regulatory framework for Title II of the Jumpstart Our Business Start-ups (JOBS) Act of 2012, that legalised interstate equity crowdfunding (ECF) in the USA. Concurrently, 18 states have passed legislation or regulations to allow intrastate ECF. Yet, the literature has not fully addressed what this nascent funding mechanism will offer to investors and those seeking funding for entrepreneurial projects in the USA. This article reviews current US legislation and the federal and state laws as they pertain to ECF. It also discusses the anticipated implications of ECF, provides a conceptual model that demonstrates how crowdfunding can change the traditional equity-financing continuum and discusses externalities that may emanate from implementation of this relatively new means of raising capital.

Suggested Citation

  • Lynda Y. de la Viña & Stephanie Lee Black, 2018. "US Equity Crowdfunding: A Review of Current Legislation and A Conceptual Model of the Implications for Equity Funding," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 27(1), pages 83-110, March.
    • Handle: RePEc:sae:jouent:v:27:y:2018:i:1:p:83-110
    DOI: 10.1177/0971355717738600
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    References listed on IDEAS

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    Cited by:

    1. Nguyen, Thang & Cox, Joe & Rich, Judy, 2019. "Invest or regret? An empirical investigation into funding dynamics during the final days of equity crowdfunding campaigns," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 784-803.

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